In a recent ruling, the Income Tax Appellate Tribunal ( ITAT ) of Chennai remanded a dismissed appeal following the dismissal of the said appeal being due to both “non-prosecution simpliciter” and non-condonation of delay.
This appeal, concerning assessment years from 2016-17 to 2021-22, was brought by the assessee/appellant, Medavakkam Vattara Nadargalikkiya Sangam, a Tamil Nadu-based association. Initially, the Commissioner of Income Tax (Appeals) [CIT(A)] dismissed the appeal based on procedural grounds, including a delay in filing and a lack of active pursuit by the appellant.
The original tax assessments were processed by the Centralized Processing Center in Bengaluru under Section 143(1) of the Income Tax Act 1961 (ITA), determining a total income for the appellant and raising a significant tax demand. The appeals filed by the assessee were delayed by an extensive period of 1694 days. The CIT(A) did not condone this delay, stating that the appellant had not demonstrated a “reasonable and sufficient cause” as required by law, arguing that a mere reasonable cause was insufficient. The CIT(A) also referenced judicial precedents to highlight that a litigant must be diligent in protecting their rights, citing the Supreme Court’s stance that appeals should be more than a mere formality—they must be actively pursued.
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Upon review, the ITAT bench of Mr Mahavir Singh, and Mr Jagadish, examined the procedural dismissal. The Tribunal highlighted that the CIT(A)’s approach was unduly rigid, noting that the law does not mandate the outright rejection of an appeal based solely on a missing application for condonation. The tribunal stressed that under Rule 3A of the Code of Civil Procedure (CPC) Order 41, dismissal is not compulsory when such an application is lacking; instead, the appellant may remedy procedural defects. The ITAT remarked that, in line with the principles of justice, even vigilant litigants are prone to mistakes, and the goal should not be to close off adjudication but rather to ensure that genuine grievances are addressed.
The ITAT also observed that the CIT(A) erred in dismissing the appeal without addressing the substance of the case. It cited the Madras High Court decision in Southern Steel Industries v. AAC (CT), which upheld that appellate authorities must adjudicate appeals based on merit, even in cases where the appellant fails to appear. Concluding that the CIT(A) lacked jurisdiction to dismiss the appeal solely on procedural grounds, the ITAT set aside the dismissal. The matter has now been remanded to the CIT(A) for a fresh adjudication, instructing the authority to consider the delay issue first and, if condoned, to address the merits of the case.
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